THE cut-throat nature of the beef industry has been revealed in a comparison of prices for meat cuts sold to Japan in October.
The figures, compiled by Miho Kondo, manager of Japan Trade Services for Meat and Livestock Australia, show just a few cents a kilogram separated US and Australian beef on major items such as loins and briskets.
It is unusual to see such a snapshot into an export market, and Mr Kondo said he was able to get the data from Japan's Ministry of Finance import statistics and trade news publication Chikusan Nippo.
The figures showed in October:
THERE was a difference of 13c/kg for chilled loins imported from Australia and the US into Japan, with Aussie beef selling for the slight premium;
THERE was 1c/kg difference on frozen loins; and
THERE was 4c/kg difference on frozen briskets.
Mr Kondo said the concern was how price-competitive US beef was against Australia, and its increasing market share.
He said that, broken down by storage and cut category, the average price of US beef was extremely competitive against Australian offerings, despite the US age limitation protocols (it can sell beef only from cattle aged less than 22 months because of its past bovine spongiform encephalopathy or mad cow problems) and its grainfed orientation.
Mr Kondo believed that, historically, there would have been a greater price gap between meat from the two countries, with US beef usually priced at a tier above the Australian product.
He is trying to access Japanese data from past years to build a picture of pricing trends over time.
He said the current situation was probably being skewed by the unusual currency situation, specifically the weak US dollar against the Japanese yen.
Currency fluxes were particularly helping the US chilled beef business into Japan. From January to October this year the US sold 98,573 tonnes of beef into Japan - up 40 per cent on the same period last year.
The US took a further 8 per cent of the chilled beef market share from Australia in October, when it exported nearly 5500 tonnes.
While Australia exported 10,898 tonnes of chilled beef in October, the gap is constantly narrowing.
And the situation could change again for the worse if the US is able to broker a better beef access deal with Japan after the two countries began official talks late last month about current cattle age and supply protocols.
Mr Kondo said some Japanese meat traders were anticipating a change in US supply protocols as early as April next year, while others believed it would be later.
Meanwhile, Australian exporters are still managing to move good quantities of beef around the world despite the global financial problems, with the latest figures for November showing near-record sales.
Beef exports for November totalled 89,747 tonnes, which is the largest monthly volume since October 2008, according to statistics from the Department of Agriculture, Forestry and Fisheries.
But exports for the final weeks of this year are expected to be reduced by the rain that has fallen across parts of NSW and Queensland, and which have slowed the supply of slaughter cattle to meatworks.
The spin-off from all the rain has been unusual northern buyer competition at southern markets, which has helped underpin dearer rates for cows and heavy export cattle.
Last week, there was Queensland competition at some Western District prime sales, including Warrnambool.
It has resulted in diverging price trends across Victoria, as the saleyards that are attracting northern competition move ahead in price.
A case in point was Wodonga last week, where according to the National Livestock Reporting Service, D4 heavy cows (520kg plus) averaged 164.8c/kg or $1087 a head.
In comparison, the same class of cows sold at the Pakenham export sale that week averaged 157.3c/kg.
